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Ex-Islanders co-owner Paul Greenwood’s sentence reduced

Paul Greenwood on Feb. 25, 2009. His prison term for a massive investment fraud was cut in half to 5 years at a resentencing in Manhattan federal court on Wednesday. Photo Credit: Bloomberg News / J.B. Nicholas

Former New York Islanders co-owner Paul Greenwood’s prison term for a massive investment fraud was cut in half, to 5 years at a resentencing in Manhattan federal court Wednesday.

Greenwood, 69, cooperated with prosecutors after he and partner Stephen Walsh, a former Islanders executive, were charged with issuing phony promissory notes to cover losses in their investment fund and diverting $80 million to fund expensive lifestyles.

Greenwood was sentenced to 10 years in prison in 2014 by U.S. District Judge Miriam Cedarbaum.

That sentence was overturned on appeal in February because, although Cedarbaum cited “devastating” losses to individual investors, the record of the case showed losses only to pension funds.

U.S. District Judge Loretta Preska said Wednesday the sentence reduction was justified based on charitable works Greenwood had performed throughout his life, his work with other inmates in prison and his cooperation both in the prosecution of Walsh and in aiding a receiver to recover more than 95 percent of the losses.

“I have full confidence we do not need to incarcerate Mr. Greenwood to protect the public from further crimes of his,” the judge said.

Greenwood and Walsh were partners in a group that controlled the Islanders in the 1990s. In a fraud unrelated to the team, the two were charged in 2009 with cheating investors in their WG Trading Co. Walsh was sentenced to 20 years in prison.

Formerly of North Salem in Westchester County, Greenwood is serving time at Butner Federal Correctional Institution in North Carolina. He was not present in court Wednesday, but participated through an audio hookup.